McCloud Judgment and Remedy FAQs - After the Remedy Period

NICS Pension Schemes - McCloud Judgment Remedy FAQs

What pension scheme will individuals be a member of from 1 April 2022?

From 1 April 2022, all those who continue in service will be eligible to do so as members of their respective reformed pension schemes (i.e., those introduced in 2015, of which many are already members), regardless of age. This includes members who were previously covered by ‘transitional protection’.

This means that members will keep any service earned within the legacy schemes up until that date and will be able to access those benefits in the same way and at the same time as they are currently able to, but any pension benefits earned after will be within the reformed pension schemes.

The legacy unfunded schemes will be closed to future accrual from April 2022.

Why are the reformed pension schemes being used from 1 April 2022?

The reasons for the 2015 reforms still stand. Public service pension provision has to be affordable and sustainable in the long term. The reforms aimed to achieve this, whilst also being fairer to lower and middle earners.

The schemes that were introduced in 2015 following the recommendations of the Independent Public Service Pensions Commission (the reformed schemes) offer generous pension provision, improve affordability and sustainability, and are fairer to lower and middle earners.

The reformed schemes are some of the most generous available: backed by the taxpayer; index-linked; and offering guaranteed benefits on retirement; comparing very favourably to the typical private sector scheme.

The reforms created a fairer system. The move from (mostly) final salary to career average pension means members accrue their pension at a typically higher annual rate based on their average salary. Although some members are better off in legacy schemes, the reformed schemes are more beneficial for others, particularly many lower paid members. 

The transitional protection policy, which gave rise to discrimination, will have been removed and, from 1 April 2022, all those who remain in service will do so as members of reformed schemes, treating everyone equally in this respect, and ensuring the aims of the 2015 reforms are met.

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